Graduates 'may be hit with tax on jobs'

The Treasury has decided to go ahead with a plan to impose tax changes for temporary jobs which would affect 150,000 workers, including graduates hoping to get temporary work over summer.

Withdrawal of the staff hire concession, which means that temporary employers do not have to pay value added tax on the salaries of staff, would come into effect on April 1st if plans go ahead.

The Recruitment and Employment Confederation (REC) has expressed concerns that the tax changes will prevent jobs from being created.

Director of external affairs for REC Tom Hadley said: "We are doing a lot of work with the Department for Work and Pensions to help provide guidance to job seekers but we need to make sure there are still opportunities out there."

University leavers finding it difficult to find graduate jobs have recently been warned not to ignore temporary work by the Association for Graduate Recruiters, which told the Times that temporary jobs are better than nothing.